April 2008

This publication was produced by Nathan Associates Inc. for review by the United States

Agency for International Development. April 2008

This publication was produced for review by the United States Agency for International Development. It was prepared by Abdel Meguid Fouad and Raymond Lawler

PORT OF DAMIETTA OPERATIONAL EFFICIENCY EVALUATION AND RECOMMENDATIONS

Port of Damietta Operational Efficiency EVALUATION AND RECOMMENDATIONS

TECHNICAL ASSISTANCE FOR POLICY REFORM II

CONTRACT NUMBER: 263-C-00-05-00063-00

BEARINGPOINT, INC.

USAID/EGYPT POLICY AND PRIVATE SECTOR OFFICE

APRIL 2008

AUTHOR: ABDEL MEGUID FOUAD AND RAYMOND LAWLER

DISCLAIMER

This document is made possible by the support of the American people through the United States Agency for International Development (USAID). Its contents are the sole responsibility of the author or authors and do not necessarily reflect the views of USAID or the United States government.

I I P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

CONTENTS

1. Introduction 1

Port Operational Strengths 1

Port Operational Weaknesses 2

2. Current Port Operations 5

Berth Occupancy Rates 5

Container Terminal Operations 6

General Cargo Operations 7

Improve Rigging Systems 8

Unitize and Palletize 8

Adopt Indirect Delivery 9

Bulk Cargo Systems 11

Comparison to Other Ports 12

Alexandria 12

El-Dekheila 12

Summary and Conclusions 13

3. Operational Implications of Proposed Terminal 15

Basin and Yard Issues 16

Channel and Harbor Congestion Issues 18

Summary and Conclusions 20

4. IT Systems and Operations Control 21

Improve Data Use 21

Executive Information System 21

IT Governance 21

Data Verification 22

Upgrade Vessel Traffic Services 23

Improve Wireless Network 23

RF Site Survey Tips 23

Mesh Wireless Networking 25

Summary 26

5. Port Development 27

Efficient Cargo Handling 27

Master Planning 28

I N T R O D U C T I O N I I I

Summary and Conclusions 29

Port Operations Recommendations 29

Container Operations 29

General Cargo 30

Port Information System 30

6. General Port Sector Policy Recommendations 32

Appendix. How to Handle Wood as General Cargo A-1

Illustrations

Figures

Figure 2-1. Inappropriate Rigging for Handling Bundled Lumber 8

Figure 2-2. Indirect Discharging Operation, Warehouse or Open Storage 10

Figure 3-1. Suezmax Container Vessel 15

Figure 3-2. Proposed Terminal and Berths with 280-Meter Basin 17

Figure 3-3. Proposed Terminal and Berths with 320-Meter Basin 19

Tables

Table 2-1. Berth Occupancy Rates 5

Table 2-2. Summary of Data on Container Operations and Other Operations 5

Table 3-1. Comparison of Land Resources with Basin Width at 280 versus 320 Meters 18

Exhibits

Exhibit 4-1.

Simplify 802.11 Deployments with the Right Tools 24

Features of a Good Master Plan 28

1. Introduction

Under the Technical Assistance for Policy Reform II Program, a consultant team from Nathan

Associates assessed port operations at the Damietta Port Authority (DPA) from February 19

through March 6, 2008. The primary objectives were to

• Recommend ways to improve operating efficiencies;

• Identify and evaluate systemic problems that affect current port operations or that could affect

future development and recommend ways to address these problems; and

• Assess policy related to port operations and development and recommend changes if

necessary.

Port operations specialist Raymond Lawler and port IT specialist Abdel Meguid Fouad met with

Egypt’s Deputy Minister of Transportation, Omar Elbakry, to discuss the assessment scope and

purpose. They then visited the port at Damietta twice during the study period, meeting with the

chairman and senior managers and touring the facilities with port officials to develop a detailed

perspective on the IT system and collect detailed statistics and non quantitative data on

operations. For comparative purposes, they also toured the Ports of Alexandria and El-Dekheila

and discussed operational and development issues with senior managers.

PORT OPERATIONAL STRENGTHS

First impressions of the port at Damietta were very positive. With a minor exception, the

impressive state-of-the-art security system meets all USTSA, CSI, and ISPS security

requirements for gate processing and the securing of sensitive internal facilities, offices, and

operation areas. Visitors’ identification is validated against appointment lists, visitors’

movements are monitored, and visitors are received by authorized staff and escorted to the

persons with whom they have appointments. During the study team’s tour, a security vehicle

escorted the van provided for touring.

The port’s IT system is also modern. A considerable amount has been spent to develop an

integrated port management system that includes a gate control and truck booking and

monitoring system, a container terminal management system using NAVIS as the primary

software, and a general cargo inventory control system. System installation has been underway

for about 18 months and the systems integrator has made good progress in installing the key

hardware and software and developing customized software for integrating functions. The one

major problem is that the RDT system specified for the container terminal does not work as

required; consequently, operations are still controlled manually even though NAVIS is available.

This is having a significant negative impact on the operation of the container terminal. A

proposal for an alternative communication system is being processed.

2 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

We were also impressed by the quality and quantity of capital equipment. The Damietta

Container & Cargo Handling Company (DCHC), which operates the container terminal, has 6

new post-Panamax quay gantry cranes with 50-56 meter outreach and two older Panamax

cranes with a 45-meter outreach. The post-Panamax cranes are backed up by 10 new 40-ton

rubber-tired gantry cranes (RTGs) with 2 more on order. This equipment is supplemented by 6

mobile harbor cranes, 6 reach stackers, 18 top picks, and 19 forklifts of varying capacities. The

bulk quay has a Siwertell discharger for clinker, large specialized evacuators for handling grain,

and hopper conveyor systems for loading dry bulk materials.

It was also clear that the port employs a very competent and highly skilled staff of professionals

who know their jobs and are very open to new ideas. These qualities were particularly

noticeable among the IT, document processing, operations, and engineering staff. These staff

members answered our questions in detail or quickly secured answers from other sources.

PORT OPERATIONAL WEAKNESSES

The tours also revealed several areas that need improvement if the DPA is to fulfill its mission.

Our first and general impression is that work on quays and berths proceeds very slowly. This

was particularly noticeable at the general cargo berths, where the operators used relatively

primitive methods to handle general cargo and employed ship-to-truck delivery systems, one of

the slowest ways to discharge a vessel. The operators were also using portable bagging units

on the quay to bag grain directly from the ship for loading onto trucks. This procedure nearly

triples the time to discharge a vessel. These operations also appeared to be very careless,

resulting in much damaged cargo, especially wood products. The bulk handling operations

seemed to be more productive but are not yet up to international standards.

The tour of the container terminal also provided a number of surprises. Despite the presence of

two fourth-generation container vessels, crane operations and container handling at berths 1

and 2 seemed very slow. Container discharge and stowing and vessel turnaround lacked

urgency, and yard operations were also very relaxed. It is possible that we arrived during a

scheduled break or when the vessel was waiting to be convoyed out of the port. Even so,

terminal layout was not conducive to high efficiency operations. The terminal used two relatively

incompatible operating systems—an RTG system associated with the post-Panamax cranes on

berths 1, 2, and part of 3, and a reach stacker system primarily associated with berths 3 and 4,

with stacks 3-4 wide and 3 high. RTG systems are usually used in high-density, high-throughput

operations while reach stackers are used for smaller, low-density operations. They do not mesh

well when operating together on a single terminal.

In addition, stack organization could be greatly improved, especially with regard to the service of

reefer and the handling of empty containers. These tend to be located in the back of the

terminal in a rather disorganized manner that blocks traffic lanes. Discarded junk and out-of-

service machinery also clutter the area. For example, an out-of-service RTG was parked at the

end of a stack and much junk had accumulated around its base. All in all, the combination of

poor stack organization and sloppy housekeeping prevents realizing the potential of the new

cranes since crane productivity is determined by the ability of the yard to clear or feed the hook.

I N T R O D U C T I O N 3

We were also presented an overview of the proposed container terminal and its target market,

Suezmax mother ships serving the Asia–Europe container trades. Our first impression is that

these operations will cause serious vessel congestion in the harbor, particularly with respect to

managing vessel traffic in a single-lane channel. In addition, the proposed basin width of 280

meters does not provide enough maneuvering room for tugs in the event of an emergency,

thereby creating serious safety problems for vessel berthing. Finally, the allotted yard space

does not appear to be sufficient for anything but a rapid throughput transshipment operation.

In summary, regardless of how well a port is managed, particularly a landlord port, it will have

problems. Damietta faces a number of problems that should be addressed soon, including

• High berth occupancy and low vessel discharge/stowage rates.

• The use of two incompatible operating systems at the DCHC container terminal.

• General cargo handlings systems that need to be significantly improved.

• Poor condition of road and rail access into the port.

• Conflicting land uses that impede quay operations.

In addition, the port master plan needs to be updated to guide decisions about allocating space

for new operations and facilities, and the impact of the proposed container terminal on

operations should be carefully evaluated. Chapters 2 and 3 address port operation and other

development issues; Chapter 4 addresses IT issues, and Chapter 5 addresses general policy.

2. Current Port Operations

BERTH OCCUPANCY RATES

According to DPA officials, the port has an average berth occupancy rate of 80 percent. During

our first tour of the facilities, all but three berths were occupied and at least ten vessels were

waiting in the anchorage. Table 2-1 provides a two-month sample of occupancy by berth

number. Berth occupancy rates of 70 percent or more (30-35 percent on a container berth)

indicate rising congestion in the harbor and on the quays. Rates above 90-95 percent indicate

serious congestion and operating problems that significantly affect the port’s ability to achieve

international standards of operating efficiency and services.

Table 2-1

Berth Occupancy Rates

Berth Percent Berth Percent

Cont. Ter. (1-4) 60 13 143

05 119 14 125

06 94 15 106

07 110 16 134

08 94 In Anchorage/

Lighterage

29

09 106 Gas-1 24

10 77 Gas-2 7

11 112 Port average 56.9

12 138 Avg w/o private terminals 70.0

Except in the gas and specialty terminals, the berth occupancy rates are very high, averaging

109 percent. Nine of the 16 berths had rates above 100 percent, indicating frequent

simultaneous berthing of multiple smaller vessels. Only berth 10 was below 80 percent. The

exceptionally high 60 percent occupancy rate for the container terminals indicates serious

problems with operations.

These high occupancy rates are more indicative of slow vessel discharge/stowage than of

harbor capacity to handle the existing traffic. Table 2-2 provides a statistical breakdown of

factors that affect vessel stays at berths, such as total TEUS discharged/loaded, handling rate

per working hour, and handling rate per vessel call. Measures include time at berth, tons or

TEUs discharged, calculated berth productivity per period worked, calculated berth productivity

per vessel call, and berth productivity relative to vessel size.

Table 2-2

Summary of Data on Container Operations and Other Operations

Category Hours Metric TEUs Avg

6 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

Anchor Worked Per call Tons D/L Tot,/

Call

Per hr. Hr/call NRTa

<-100 TEUs/call 9.0 16.4 25.5 173.0 18.2 36.4 3.4 2.4 12,084

>-100 TEUs/call 8.7 16.2 24.9 1896.1 199.6 399.2 28.4 23.0 19,170

Total containers 8.8 16.2 25.1 994.6 104.7 209.4 15.3 12.3 15,442

Berths 1-2 5.8 13.9 19.7 1148.1 120.9 241.7 19.4 15.6 21,614

Berths 2-3 5.0 14.6 19.5 1245.86 131.1 262.3 20.4 17.2 23,488

Berths 3-4 12.4 18.4 30.9 776.6 81.8 163.5 10.1 7.7 8,167

Hours Metric Tons Other

Operations Anchor Worked Per call

Days/

call Total Per hrb Hr/call

Avg

NRT

General cargo 83.8 80.6 188.0 7.8 53.6 2.2 1.0 2,007

Refrig. cargo 46.9 68.0 115.0 4.8 1764.0 32.5 16.5 1,764

Bulk carriers 55.5 140.1 210.2 8.8 57300 409.0 272.6 10,928

a Net registered tonnage

b The exact, actual unit of measure is not clear from the data provided. Consequently, assumptions were made relative to the total amount

transported versus the NRT of the vessel.

Table 2-2 is based on a two-month sample set of statistics provided by the IT department at

Damietta. Those statistics covered time of arrival in the anchorage, berth number, time at berth,

time when worked commenced, time when finished, total cargo handled, and basic vessel

dimensional characteristics. Because of problems with the controlling RDT system, container

vessel information includes only the totals expressed in kilograms that were discharged and not

information on loaded containers. To estimate total TEUs handled per call, we converted

kilograms to metric tons and then divided by 9.5mt, which is the worldwide average weight per

TEU. Because container carriers strive to balance their outgoing containers (full exports plus

empty containers) with incoming units, we multiplied this total by 2 to represent the total TEUs

handled per call. A review of the raw number indicates that these estimates are fairly close to

the mark.

CONTAINER TERMINAL OPERATIONS

Addressing the container terminal berths there are a number of significant measures to be

noted. These are as follows:

• The load/discharge rate for small container ships is 2.4 TEUs and for large containers 23

TEUs.

• Small vessels are handled primarily at berths 3-4, which are equipped with old Panamax

cranes and serviced by a slow reach stacker operation. The relatively low average number of

TEUs handled on these berths indicates that they service primarily feeder service operations.

C U R R E N T P O R T O P E R A T I O N S 7

• Productivity at berths 1,2, and part of 3 is very low, averaging between 19-20 TEUs per

vessel working hour and 15 to 17 TEUs per call despite the availability of six modern post-

Panamax cranes.

• Handling rates for berth 3-4, which seems to focus on smaller coastal vessels, is an extremely

slow 7.7 TEUs per hour.

This poor performance is primarily the result of operational problems and poor yard

organization. Solving problems with the RDT communication system will greatly improve

planning and yard control in the short term. In addition, the yard needs to be reorganized to

better facilitate tractor movement and yard-stack interface. Reorganization will entail cleaning up

unusable equipment, parts, and trash; reconfiguring reefer service areas into RTG-serviceable

stacks integrated with service platforms providing power; and monitoring equipment in the stack.

The operators should also consider developing an off-terminal Inland Container Depot (ICD )as

is being done in El-Dekheila with the development of a multi-agent container park for handling

empty containers.

Terminal officials say they are giving priority to deepening the draft alongside the main berths to

17 meters to handle the mother ships. But this may be putting the cart before the horse. The

terminal, particularly in yard operations, is not ready to handle large volumes of transshipment

traffic or handle traffic at much higher speeds. Three things need to be done before the

operators can even consider handling the large mother ships:

1. Reorganize the entire terminal into a high-density RTG operation to facilitate horizontal

transshipment operations. This will require removing the reach stacker operation and

achieving denser organization of traffic lanes.

2. Upgrade current operations to acceptable industry standards by rapidly completing the

container terminal management system and giving staff time to become adept system users.

3. Move empty containers,Container Frieght Station( CFS )operations, and all services not

essential to container handling away from the terminal.

These upgrades can be implemented in parallel with berth deepening but must be fully

implemented before operations begin.

GENERAL CARGO OPERATIONS

General cargo operations also have problems. At Damietta, the average general cargo vessel is

very small, is transporting an average of 54 MT of cargo per call, and is being discharged at an

average of 2.2 tons per hour. When compared to similar operations elsewhere (60 -100 tons per

hour for similar cargo), these rates are among the lowest we have seen—but among the easiest

to improve if the operator is willing to make the necessary changes. Such changes are not

prohibitively expensive. Productivity at Damietta can increase 400-600 percent with three

changes: (1) improve basic rigging systems for moving cargo between vessel and shore; (2)

unitize and palletize cargo as much as possible; and (3) adopt indirect delivery systems and

increase use of forklifts with specialized attachments.

8 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

Improve Rigging Systems

Rigging is the equipment used to attach the hook of the crane to the cargo to safely and

efficiently transfer it between the ship and shore. Different types of cargo require different types

of rigging systems. For example, Figure 2-1 shows a cable and hook rigging system

inappropriate for handling bundled lumber; the cabling tends to cut into and break the bands

that hold the bundles together, spilling lumber all over the place. A better rigging option is nylon

straps, which are more flexible and will not cut into the wood or bandings. A variety of other

systems can also be used, but they all work best when cargo is properly prepared (i.e., unitized

or palletized).

Figure 2-1

Inappropriate Rigging for Handling Bundled Lumber

Unitize and Palletize

Pallets are a standard way of unitizing cargo—especially pieces, small boxes, items in bags or

small barrels, machinery parts, etc. Cargo can also be unitized with Marino slings, which are

used to handle free loaded bags; with super totes (very large nylon bags with rigging straps on

the corners); with shrink wrap for items such as bagged cement or fertilizer; or with pallets with

pre-slung nylon straps that can be discharged quickly from a densely packed hold. Other cargo

is inherently unitized but requires special rigging systems for handling (e.g., rolled steel or

paper, boxed machines, steel girders, rebar). Finally, a variety of rigging systems allow higher

rated cranes to discharge multiple units at one time. For example, T-lifts can lift up to 6 pallets of

boxed fruit at a time and rigged spreader bars can discharge 6 to 10 super totes at a time

C U R R E N T P O R T O P E R A T I O N S 9

assuming the crane can handle the weight. The appendix presents a sound method for unitizing

and handling lumber.

Adopt Indirect Delivery

An indirect delivery system (Figure 2-2) is usually the most difficult option to grasp as it is

counterintuitive to the traditional way of handling cargo in this part of the world. In this system,

cargo is placed directly on the ground and moved quickly by forklift to buffer storage, such as a

transit warehouse or open storage area. By clearing the hooks as quickly as possible, the

system maximizes the cycling of the ships’ cranes and discharges vessels as quickly as

possible. Putting cargo directly on the ground eliminates the adjusting and controlling that must

take place when putting it on a truck. If cargo is properly palletized or unitized the interchange

between it and the forklift, once the hook is disengaged, takes only one or two seconds. The

forklift should be able to move the cargo into a drop-off point in the buffer zone and return to the

ship’s hook in two minutes or less to meet the next cycle of the crane. Ports well practiced in

this method, such as Philadelphia, can discharge properly palletized cargo at a rate of 300-400

tons per hour.

10 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

Figure 2-2

Indirect Discharging Operation, Warehouse or Open Storage

As cargo is discharged, a second crew inside the buffer zone receives it from the forklifts

serving the vessel, organizing it into truckload lots and loading multiple trucks at the back of the

buffer zone (see Figure 2-2). If the operator is handling a homogenous load bound for one

consignee then the entire shipment can usually be passed through the system and shipped out

in one day. For multiple consignees the process may take a little longer, but with the aid of a

warehouse inventory control system it can also be done in the same time period.

Advantages. Indirect delivery offers multiple operational and economic advantages:

• An increase in the rate of discharge and throughput (at Damietta a factor increase of 400-

600 percent).

• Continuous truck loading, whether a vessel is on the quay or not.

• A drastic reduction in the vessel berth occupancy rate.

C U R R E N T P O R T O P E R A T I O N S 1 1

• A lower per unit cost for handling cargo—50 percent or more reduction.

• A great reduction in damage to cargo.

Requirements. Using indirect delivery at Damietta will require

• A transit warehouse or open storage area behind the quay with room to queue trucks at the

back of the buffer zone.

• Four to 8 forklifts, depending on vessel size and number of hatches to be serviced. The initial

cost will pay for itself in considerable per unit cost savings as 4-5 times more cargo can be

handled in the same time period.

• Cargo palletized or unitized in a manner that permits quick and efficient handling. This means

that the operator must collaborate with the importer/consignee to ensure the cargo is prepared

properly for transport.

Cautions. Other things must also be considered when adopting indirect handling. The operator

must have an incentive to increase productivity, and for monopolies such incentives are of the

carrot and stick variety. At a minimum, the port needs to impose basic productivity standards on

the operator and provide a lease space (berth, warehouse/open storage, and truck access and

loading area) that is sufficiently large and organized to allow efficient operations. The operator

must purchase or lease appropriate rigging and cargo handling equipment and accept

responsibility for damages to the cargo when it is in his care.

In Damietta, the most appropriate place for this type of general cargo operation is berths 5-8.

The quay is fairly wide, and there are a number of large open storage areas, a large transit-type

warehouse, and a refrigerated warehouse that should already be employing the proposed

system. The biggest problem is that the railroad spur directly behind the warehouses will hinder

truck operations unless brought to grade. More important, a group of agents’ offices hinders

access to the area. If the area is properly designed and laid out, however, space behind the

warehouses is sufficient for truck loading that does not impinge on the agents’ offices.

BULK CARGO SYSTEMS

It appears that the port possesses sufficient specialized bulk handling systems—a large grain

silo/berth operation employing large vacuvators, numerous floor-loaded grain and other bulk

warehouses, portable vacuvators for discharging grain ships on open berths, a clinker handling

system, etc. All systems appear to be in good condition and well utilized. Unfortunately, two

months’ worth of data is insufficient for assessing the systems’ average productivity. According

to available data, the typical bulk carrier spends three days in the anchorage and remained on

berth six days for discharging or loading. Carriers were relatively small 11,000 NRT carrying an

average of 57,000 MT and were discharged at a rate of 409 tons per hour. These vessel

discharge and turnaround rates are about average for the systems employed. Serious problems

cannot be detected without a more detailed assessment of the systems themselves or analysis

of more comprehensive data operations.

12 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

COMPARISON TO OTHER PORTS

We also toured the Ports of Alexandria and El-Dekheila to observe container terminals, general

cargo and bulk cargo areas, and IT operations. (No detailed data on productivity or other

operational aspects were gathered.) As at Damietta, both ports had excellent security, IT

systems, and modern equipment and were well run.

Alexandria

The Port of Alexandria is hemmed in by a dense urban environment, so development of new or

more efficient facilities and operations is highly constrained. Recent road construction has

greatly improved access to main facilities, but many facilities are old and were designed for a

different period of operations. This problem is particularly true for general cargo and

warehousing operations. As at Damietta, discharge is very slow, operators use inappropriate

rigging systems, and a significant amount of cargo, particularly lumber, is being damaged.

Container operations are also constrained by location and lack of space. Access to and from the

terminal is difficult. The terminal has only 3 quay cranes (2 Panamax and 1 post-Panamax) and

4 RTGS, which is insufficient for the traffic. Yard operations, which appeared to suffer from

congestion, could be better organized. There is very little space for storing empty containers.

Yard effectiveness in serving the cranes is difficult to assess without statistical data, but one can

probably safely assume that the yard shares some of the same problems and causes as

Damietta.

The bulk coal terminal next to the container terminal has seen better days. The equipment is

very old, the rail access very poor, and the whole operation highly constrained by location. The

terminal also has a variety of environmental problems.

In sum, the port’s site and growth constraints have hampered development of operationally

efficient facilities and services. Many of the upgrades suggested for Damietta apply to

Alexandria. Space rationalization and a re-evaluation of land use would also be beneficial.

El-Dekheila

The Port of El-Dekheila has significant land resources that are well planned and utilized. It has

wisely focused on specialized markets, primarily bulk products such as coal, iron ore, grains,

and fertilizers, and the bulk facilities are state of the art. The planning program seems pro-

active; for example, a container park to be used by multiple agents for empty container storage

and recycling is being developed. Warehousing operations appear to be well organized but

general cargo handling operations suffer from the same problems found at Damietta and

Alexandria.

The container terminal also has many of the same problems as at the other ports. Yard

congestion appears to be worsening. Many empty containers appear to be stored in the main

yard and near the CFS (which accounts for the need for the off-terminal container park). More

important, given the volume of traffic, the yard does not appear to have enough RTGs and yard

tractors. The brochure that was provided indicates that the terminal has 5 post -Panamax and 6

RTGS. For normal operations, the rule of thumb is 2 RTGs per crane, but this terminal has just

C U R R E N T P O R T O P E R A T I O N S 1 3

over one per crane. Also given that it is a three-berth terminal it could benefit from and

additional quay crane or two.

The port is in very good shape and has considerable room for expansion. The container

terminal and general cargo area could benefit from investment in support equipment and better

training and expert advice in modern cargo handling techniques.

SUMMARY AND CONCLUSIONS

Overall, the port at Damietta has serious problems with berth congestion due primarily to very

low berth productivity. A variety of factors contribute to this situation, as follows:

• Container terminal. Problems with the Container Terminal Management System’s (CTMS)

implementation, different handling systems in same yard, inefficient yard organization, and

secondary services, empty containers, and junk cluttering the premises.

• General cargo and some nonspecialized bulk cargo. Inappropriate handling equipment, a

preference for discharging to trucks, provision of secondary services (bagging) on quays, and

lack of cargo palletization.

• General operations. Lack of exposure to modern cargo handling methods or new

technologies that are standard in most developed ports.

• Productivity incentives. There appears to be insufficient economic and regulatory incentives

to increase productivity.

• Productivity standards. Cargo handling and vessel service operations on most quays are

contracted to private or semi-public operating companies, and port management tends to

assume that low productivity is their problem, not the port’s. The DPA makes little effort to

spur operators to improve their productivity.

Given the rapidly rising demand for new port services and plans to develop new port industries

and a Suezmax container terminal, the DPA must begin to improve berth occupancy rates and

berth productivity. Chapter 3 presents the operational implications of the proposed terminal in

detail.

3. Operational Implications of Proposed Terminal

Because neither the DPA nor the Ministry of Transportation was able to provide a copy of the

operational and economic feasibility study developed for the proposed terminal, our analysis

focuses on only three areas: (1) the effect of the design of the proposed ship basin and berthing

plan on navigation and safety; (2) the availability of land for container yard operations; and (3)

the impact of the project on vessel traffic in the harbor.

On the basis of conversations with various ministry and port officials, we do know a number of

things about the proposed terminal. First, the target market is Suezmax container vessels as

represented by the Emma Maersk, the largest container ship capable of transiting the Suez

Canal (Figure 3-1). Its basic dimensions are:

• LOA 397M/1302’6”

• Beam 56m/183’8”

• Hull depth 30m/98’4”

• Draft 15.5m/50’10”

• Capacity 13,500-15,200 TEUs

Figure 3-1

Suezmax Container Vessel

Second, a ships basin approximately 1,083 meters long, 280 meters wide, and 17.5 meters

deep is to be dredged. Third, berths are proposed for both sides of the basin, with capacity for

three Suezmax vessels (five for vessels with LOAs of 300 meters or less). Fourth, the total

project area is approximately 110 hectares or 264 acres. Finally, according to port officials,

when fully operational this facility is expected to generate up to 3,000 new vessel calls per year

within the next to years. We also know that the port is accessed via a one-way traffic channel

and a turning basin with a diameter of 580 meters. Thus, the main issues to be addressed are:

• Is the proposed width of the basin wide enough for safe operation of a Suezmax vessel?

• Is there sufficient space on the proposed terminal to handle the container traffic to be

generated?

• Can the port effectively handle a doubling of vessel traffic?

16 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

Fully addressing these issues requires substantial analysis and far more information and time

than was available for our assessment. Our objective, then, is to define and analyze the

dimensions of any problems and recommend options for solving them.

BASIN AND YARD ISSUES

To maximize container yard area the developers have proposed a basin width of 280 meters, or

5 times the beam of the largest expected vessel (56 meters). This is a basic rule of thumb used

by planners for calculating the separation between berths opposite of each other. This width

allows two vessels of 56-meter beams to be stationed at opposite berths and then provides 56

meters on either side of an incoming or outgoing vessel also

with a 56-meter beam. A vessel of this size vessel will have

to be assisted by very large and powerful tugs that

commonly range from 30-35 meters LOA. If the tug must

push vertically on the vessel when it is on the basin

centerline it will have only 21-26 meters between it and the

vessel at berth behind it to maneuver. This is a very small

space to control a vessel 400 meters long and 30 meters

high.

These minimum dimensions are proposed to maximize yard

space. Is the gain in yard space worth the risk of a

catastrophic accident in the basin due to insufficient

maneuvering room? Figure 3-2 is a conceptual layout of the

proposed terminal and basin with capacity to handle three Emma Maersk size vessels. It shows

the possible positioning of four 30-meter tugs moving a vessel to a back berth between two

vessels already at berth. The assumption is that it is on course moving along the basin

centerline. But is there sufficient room between the various vessels to compensate for

• Normal deviations in course due to wind, currents, and other environmental conditions?

• The “oops” factor, or unexpected events, such as loss of power by a tug, a breakdown in

navigational equipment, or a missed calculation by the pilots or crew of the ship or tugs?

We were informed that the designers were completing desktop simulation models testing factors

that could cause problems in the basin and how the crew, pilots, and tug operators could

respond to them. The results of this study have not been received as of this writing. The

problem with such models is that they do not incorporate or assess the oops factor very well.

Given traffic congestion that this project will likely generate, it does not seem that there is

sufficient maneuvering space to react quickly and appropriately to an unexpected event.

The Oops Factor

In New York City, a large tower crane erected

on a building construction site was stabilized by

a single cable that met minimum safety

specifications for the situation. Safety

inspectors had only recently approved the site.

During operations the crane operator

accidentally cut the cable and the crane

toppled and collapsed a building, killing six

people. The accident was apparently caused

by unpredictable human error.

I M P L I C A T I O N S O F P R O P O S E D T E R M I N A L 1 7

Figure 3-2

Proposed Terminal and Berths with 280-Meter Basin

18 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

What if another 40 meters were added to the basin width? How much more room would be

available to cope with unexpected events in the basin and how much less space would be

available for the yard? Figure 3-3 illustrates the trade-off between maneuvering space (risk) in

the basin and available space in the yard. Available maneuvering space between vessels would

increase to 76 meters on either side of the centerline of the incoming/outgoing vessel. Intuitively

this appears to be a more comfortable distance and certainly reduces risk. Table 3-1 compares

land resources available with a wider basin versus the original width basin.

Table 3-1

Comparison of Land Resources with Basin Width at 280 versus 320 Meters

Option Land Lost Land Remaining Ha/b, 3 Berths 4 berths 5 berths

280m (as designed) 22.4 ha 88.0 ha 29.3 ha 22 ha 17.6 ha

320m (40 meters

added)

27.0 ha 83.2 ha 27.7 ha 20.8 ha 16.6 ha

Difference 4.6 ha 4.8 ha 1.6 ha 1.2 ha 1.0 ha

In sum, the project gains a little more margin for error at the expense of 1-1.6 hectares per

berth—not a bad trade-off in the larger view. The problem is that the land directly behind the

southwest set of berths does not have enough backup yard directly behind it to effectively

absorb a surge of 3,000 to 4,000 containers as might be expected in a transshipment operation

involving Suezmax vessels. We suggest four options:

1. Move the small liquid bulk storage facilities to the proposed reclaimed area at the end of the

bulk quay and use the vacated space.

2. Go to a more dense and automated operation using rail-mounted bridge cranes.

3. Handle smaller vessels on the southwest quay and the Suezmax vessels on the northeast

side.

4. Expand the yard into the lands to the northeast and locate secondary services there

(maintenance facilities, administration, utilities, equipment, and empty storage).

There are variety of ways to overcome the minimum loss of yard space while gaining safety and

reducing the port’s overall risks. It must be kept in mind that once built, it will not be

economically possible to change it.

CHANNEL AND HARBOR CONGESTION ISSUES

If up to 3000 more vessels per year will be in the harbor annually over the next ten years, as

local officials project as a result of the new container terminal, then the port has a serious

problem. That number of vessels is a doubling of the current vessel population. The port’s

current berth occupancy rate is 109 percent on common usage quays. A doubling of traffic

amounts to 6,000 or more vessel calls per year, or an average of 17 per day. Sample data show

an average stay in port by all vessels of 2.24 days. If berth productivity does not improve the

port will have to provide berths for an average of 38 ships in the harbor per day.

I M P L I C A T I O N S O F P R O P O S E D T E R M I N A L 1 9

Figure 3-3

Proposed Terminal and Berths with 320-Meter Basin

20 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

So what are the options for dealing with this problem? First, the DPA must work with the berth

operators to greatly increase berth productivity. In some cases, such as the general cargo berth,

significant increases can be had at minimum expense. This need can be accommodated by

bringing in operational experts on a regularly scheduled basis to assist operators in finding ways

to increase berth productivity and efficiency. Other cases, such as the container and some bulk

operations, will require in-depth operations planning, new technologies, and ultimately

significant investment in new infrastructure, facilities, and equipment.

Efficiencies gained on berths will reduce demand for berth space but not for passage in the

channel, particularly if the vessel sizes remain relatively the same. The current system for

convoying can only be ratcheted so far before it reaches the limits of practicability. So what are

the options? One is to gear the port’s marketing to service larger vessels at berths with high

productivity. This is a long-term strategy, however, and might not achieve the desired results.

The second more practical option is to widen the access channel to accommodate two-way

traffic or develop a second channel (given the constraints of the port this is not as likely).

SUMMARY AND CONCLUSIONS

The proposed container terminal will generate significant business and employment for the port

at Damietta and will have a major economic impact on the region. But with that success comes

a complex set of problems that the port and government have not fully evaluated. We have

highlighted some acute and likely problems—such as operational safety arising from the basin

size and vessel congestion in the port. Others include land side traffic congestion and

connections with the national transportation network, the best and most practicable use of land

in and around the project area, and upgraded systems for the control of vessel traffic in the

harbor, access channel, and anchorage.

4. IT Systems and Operations Control

The Damietta Port Authority (DPA) has had a modern IT system for two years. The port has

sufficient funds to further develop and expand the system, but could benefit from technical

assistance to ensure that the IT or automation strategy aligns with the port’s business strategy

(efficiency and profitability), that the port stays on track to achieve its strategies and goals, and

that IT performance is monitored. Areas needing improvement include data use, vessel traffic

services (VTS), and wireless implementation.

IMPROVE DATA USE

The port has already invested in a modern IT system as a first step in modernizing operations

and boosting efficiency. To capitalize on IT capabilities to improve port efficiency and to

optimize returns on IT investment, the port should implement an executive information system,

ensure IT governance, and develop a system for data verification.

Executive Information System

Senior executives use executive information systems (EIS) in making decisions that draw on

internal and external data relevant to an organization’s strategic goals. An EIS usually has

simple menus, simple interfaces, and graphical displays; produces high-level reports that pull

data from a database; and offer strong reporting and “drill-down” capabilities. They help

executives highlight, analyze, and compare trends; monitor performance; and identify

opportunities and problems. This capability is essential for port executives to monitor the port

performance in real time. Important parameters to monitor include: traffic trends, turnaround

time, berth utilization, daily revenues, revenue trends, equipment availability and utilization, and

maintenance performance reports. For the Port of Damietta, the EIS would be developed as a

software module to be added to existing applications at minimum cost.

IT Governance

IT governance means how an organization plans, directs, controls, and monitors current and

future use of information technology. Every organization—large, small, public, or private—

should ensure that its IT function supports larger strategies and objectives. The sophistication of

governance varies with size, industry, and applicable regulations. In general, the larger and

more regulated an organization, the more detailed its IT governance structure. According to the

IT Governance Institute, governance of IT focuses on five areas:

• Achieving strategic alignment of IT functions with business functions through the planning

process. True alignment occurs when the corporate side of the business communicates

effectively with IT leaders about costs, reporting, and impacts.

• Delivering on promised value by doing what is necessary to deliver the benefits promised at

the beginning of a project or investment. This may require developing a process by which

22 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

certain functions are broadened or increased when a value proposition is growing, and then

narrowed or eliminated when value decreases.

• Managing resources effectively, such as by organizing staff by skills instead of line of

business so they can be deployed to various lines of business on a demand basis.

• Managing risk in a formal framework that imposes rigor on what IT measures, what it accepts

as risk, and how it reports on risks.

• Measuring performance, for example, by instituting an IT Balanced Scorecard, which

examines where IT contributes to business goals, uses resources responsibly, and develops

human resources. The scorecard system uses qualitative and quantitative measures.

IT governance implies a system in which all stakeholders, including the port executives, internal

customers and related areas such as finance and operations, have the necessary input into the

decision making process. This prevents a single stakeholder, typically IT, being blamed for poor

decisions. It also prevents users from later complaining that the system does not behave or

perform as expected.

Data Verification

The Port of Damietta IT system is using adequate data verification techniques, based on

checksum methods. However, an IT system is as good as the accuracy of the data that it

provides. In addition to the traditional internal data verification and validation techniques, the full

usage of the IT system is an excellent vehicle for verifying data and alerting users to data

discrepancies. The IT system in the DPA is used only for limited applications, mostly financial.

Even some of the financial applications—such as accounts receivables—are still not

implemented. This limited use does not allow sufficient data verification by the port internal

users.

I T S Y S T E M S 2 3

UPGRADE VESSEL TRAFFIC SERVICES

The currently installed VTS is a basic AIS/Radar system

displaying on low-resolution displays. We recommend upgrading

to high-resolution displays, new operation consoles, and higher

definition redundant radars. Detailed specifications would be

developed after a detailed site survey. These recommended

upgrades will help the VTS keep pace with near doubling of

traffic expected with the new container terminal.

IMPROVE WIRELESS NETWORK

DPA elected to deploy a wireless network compliant with IEEE

802.11b standard, and specified a traditional 2.4 GHz frequency

band. A 5.8 GHz band, however, provides better performance

and less radio frequency (RF) interference. Egypt’s National

Telecommunications Regulatory Authority (NTRA), however,

has not approved DPA to use the 5.8 GHz band and DPA is

limited to the 2.4 GHz band. Initial implementation of the

wireless network at the container terminal faced radio

interference, poor availability, and poor performance due to use

of conventional technology and limited high towers for access

points. The DPA is planning to conduct a detailed survey and replace the conventional

technology with the newer “mesh technology.”

RF Site Survey Tips

We recommend a preliminary walkthrough of the area to detect the presence of potential RF

interference and identify possible locations for mounting access points. With preliminary findings

one can more readily plan to select access point locations, as follows:

• Perform the survey using tools (Exhibit 4-1) and talk to people in the facility to learn about

other RF devices that might be in use.

• If possible and practical, prevent the interfering sources from operating. If interference sources

cannot be simply turned off (e.g., one cannot require a nearby company to turn off its wireless

LAN), it may be possible to disallow the use of Bluetooth-enabled devices where 802.11 users

reside.

• Provide adequate wireless LAN coverage. One of the best remedies for 802.11 RF

interference is to ensure the wireless LAN has strong signals throughout the areas where

users will reside. If signals get too weak, then interfering signals will be more troublesome.

• Set configuration parameters properly. If deploying 802.11 networks, try tuning access points

to channels that avoid the frequencies of interfering signals. For 802.11 frequency hopping

systems, try different hopping patterns. The 802.11e MAC layer offers some built-in RF

interference avoidance algorithms.

• Deploy the newer 802.11s wireless LANs. Most potential for RF interference is now in the 2.4

GHz band (i.e., 802.11b).

2.4 GHz versus 5GHz

The entire 2.4GHz band is 80MHz wide,

which allows only three non-overlapping

channels. The 5GHz bands have much

more spectrum available—12 non-

overlapping channels, each with 20MHz

of bandwidth. The 2.4GHz wireless

LANs can experience interference from

cordless phones, microwaves, and other

wireless LANs. Interfering signals

degrade the performance of an 802.11b

wireless LAN by periodically blocking

users and access points from accessing

the shared air medium. If potential

interference cannot be reduced to an

acceptable level, the usual option is to

deploy a 5GHz system, which is

relatively free from interfering sources.

24 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

Exhibit 4-1

Simplify 802.11 Deployments with the Right Tools

Wireless LAN installation is tricky. One

cannot visualize the wireless medium.

Facility construction and silent sources of RF

interference affect the propagation of radio

waves, often in odd ways. The right tools

can ease the locating of access points.

Basic Tools. Laptop with an 802.11 PC

card and free site survey software from

radio card vendor. Most software displays

access point signal strength and quality to

determine effective operating range. One

makes a "best guess" about locations, then

places an access point at each location and

walks around with the laptop while

monitoring and noting signal levels. The goal

is to verify the maximum distances that will

maintain adequate signal levels, generally

the value that continues to enable operation

at the planned data rate (e.g., 11 Mbps). If

the best guess location doesn't provide

adequate coverage, one relocates the point

or adds points and repeats testing. To ease

the physical demand of toting a laptop, one

can use an 802.11 CompactFlash card with

a pocket PC device, such as the Compaq

iPAQ, Casio Cassiopeia, or HP Jornada.

This method, however, does not allow one to

detect RF interference between access

points and from other RF sources, such as

Bluetooth devices, microwave ovens, and

wireless phones. For one-time installations,

especially in smaller facilities, free vendor-

supplied software should be adequate.

Advanced Tools. An 802.11b spectrum

analyzer graphically illustrates the amplitude

of all signals falling within a chosen 22 MHz

channel. This enables one to distinguish

802.11 signals from other RF sources that

may cause interference, making it possible to

locate and eliminate the source of

interference or use additional access points

to resolve the problem. A spectrum analyzer

also allows one to monitor channel usage

and overlap.

802.11 limits up to three access points to

operate in the same general area without

interference and corresponding performance

impacts, causing difficulties when planning

the location and assignment of channels in

large networks. Spectrum analysis displays

these channels, enabling one to make better

decisions on locating and assigning channels

to access points.

Advanced site survey tools have been

developed by a handful of test equipment

companies, such as Berkeley Varitronics

Systems (Metuchen, New Jersey) and Softbit

(Oulu, Finland). Softbit'sTriCycle, which can

be loaded on a laptop equipped with a radio

card, provides a very useful display of nearby

access points, association status, signal

levels, and can display coverage areas. It

cuts the amount of time spent on surveys and

helps ensure accurate surveys. Berkeley’s

handheld Grasshopper has fewer graphical

features but weighs only three pounds.

Advanced tools are expensive—up to several

thousand dollars—they are best used when

installing multiple wireless LANs or when the

wireless LAN environment is complex.

Warehouses with many high metal racks and

manufacturing plants full of machinery will

wreak havoc on radio waves. In such

environments, the extra cost of advanced

tools is warranted.

When conducting the site survey, follow these general steps:

I T S Y S T E M S 2 5

• Obtain, verify, and mark a facility diagram. Before getting too far with site survey, locate

building blueprints or prepare a floor plan that shows the location of walls, walkways, etc.

Then walk through the facility to verify the accuracy of the diagram and to note barriers that

could affect the propagation of RF signals (e.g., metal racks and partitions and other items

usually not on blueprints). On the facility diagram, mark areas of fixed and mobile users. Mark

where mobile users will not go as well as where they will go. Fewer access points may be

needed if roaming areas are limited.

• Determine preliminary access point locations. Approximate the locations of access points

to ensure adequate coverage on the basis of the location of wireless users and range

estimates for the wireless LAN products. Plan for some propagation overlap among adjacent

access points, but keep in mind that channel assignments for access points will need to be far

enough apart to avoid inter-access point interference. Be certain to consider mounting

locations, which could be high metal masts or metal supports above ceiling tiles. Note suitable

locations for the access point, antenna, data cable, and power line. Consider different antenna

types; for example, an access point mounted near an outside wall could be a good location if

using a patch antenna with relatively high gain oriented within the facility (warehouse).

• Verify access point locations. Many wireless LAN vendors, including Cisco, Symbol, and

Proxim, provide free RF site survey software that identifies the associated access point, data

rate, signal strength, and signal quality. The software may be loaded onto a laptop or

PocketPC to test the coverage of each point. Or one may use a handheld site survey tool

available from several different companies. For example, Berkeley Varitronics Systems offers

handheld devices, such as Grasshopper and Scorpion, that provide advanced site survey

functions.

• Install an access point at each preliminary location, and monitor survey software

readings by walking varying distances from the access point. The access point does not

need to be connected to the distribution system because these tests simply “ping” the access

point—but AC power is necessary so carry an extension cord and learn where AC outlets

exist. Take note of data rates and signal readings at different points as you move to the outer

bounds of the access point coverage. In a multi-floor facility, perform tests on the floor above

and below the access point. Keep in mind that a poor signal quality probably indicates that RF

interference is affecting the LAN. Verifying this requires a spectrum analyzer to characterize

the interference, especially if there are no other indications of its source. Test results will

determine whether an access point needs to be relocated and retested.

• Document findings. Once a location is found to provide adequate coverage, identify it on the

facility diagrams to aid installation. Provide a log of signal readings and supported data rates

near the outer propagation boundary of each access point as a basis for any future redesign.

Mesh Wireless Networking

Mesh networking has been around for years; 802.11s is reserved for mesh networking standard.

The IEEE expects to ratify a standard for 802.11s in 2008. Instead of a hub-and-spoke model of

wireless communications—in which every device connects to a central access point, mesh

networking has every device in the area act as a repeater or router, relaying traffic for everyone

26 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

else. When mesh-enabled devices are very close to each other they automatically create a

wireless mesh network, and traffic hops from device to device until it reaches the nearest

Internet access point, reducing the need for central antennas and improving wireless coverage.

Current mesh proposal is for interoperable standard for 802.11s that would be built on top of

and be compatible with the current 802.11a/b/g standards and be designed so that nodes could

automatically discover each other and form mesh networks, as well as for "Mesh Portals" that

would be able to connect to regular 802.11 networks. The port also wants to build into the

802.11s protocol quality of service standards so that the network will know what traffic to

prioritize if one were streaming video around a network.

SUMMARY

The port has already taken big steps in IT implementation, but can benefit immediately from a

technical assistance program to implement the recommendations offered in this chapter. Since

most of these recommendations are applicable to all other Egyptian ports, the technical

assistance program could be performed once to the benefit of ports that have already

implemented or are planning to implement a port IT system. We strongly recommend that the

Port of Damietta improve data use by implementing an EIS and IT governance processes and

by developing a system for verifying data. We also recommend upgrading the vessel traffic

system to cope with expected increases in traffic, and improving and expediting implementation

of the wireless network for managing port operations.

5. Port Development

EFFICIENT CARGO HANDLING

Inefficient cargo handling, with the exception of the bulk systems, is a major weakness at the

Port of Damietta as well as ports in Alexandria and El-Dekheila. Inefficient handling is a major

cause of the excessive berth occupancy rates that will hinder plans to expand the ports of

Damietta and Alexandria. We were frequently advised at all ports that cargo-handling operations

are not a concern of port authorities as those operations are in the hands of private operators.

But given the myriad problems facing the DPA in developing the new container terminal it is

clear that berth productivity is indeed DPA’s problem. For example,

• Low berth productivity leads to high berth occupancy, which leads to harbor congestion, which

leads to high costs for vessel operators, which leads to higher rates for the operators’

customers—who are also the port’s customers.

• Under basic port economics, the more cargo that passes over the quay the more money the

port earns. Wharfage fees are generally the single highest source of income for the port. By

speeding up the throughput the port provides more opportunity for additional cargo to be

handled and greater economic growth.

• All terminals and port support systems are interdependent. When one element is inefficient

other elements are affected.

• If operators do not maintain industry standards then the port’s traffic growth, marketing, and

development will be hindered. High productivity in berth and terminals sells the port to new

customers; low productivity drives customers away.

The Egyptian ports that were reviewed and the Ministry of Transport need to adopt a proactive

policy and program to work with tenants and operations to improve productivity in their

operations. This can be done a number of ways. For example,

• During initial contract negotiations and in renewal negotiations, the port and operator can

agree to minimum equipment, technical, and productivity requirements based on international

rather than local norms. Incentives for achieving target throughput and productivity levels

significantly above the minimum might also be negotiated.

• The port can provide technical assistance and training in methods that raise productivity and

reduce cargo damage.

• The port can encourage tenants to invest in new equipment and operating technologies by

sharing investment costs. For example, the port agrees to invest in certain basic infrastructure

and the tenant to supply building, equipment, and operational know-how.

• The port can foster competition among operators through such means as open stevedoring,

allocation of certain berths/backup areas to competing entities with minimum performance

requirements or privatization of semi-government operating companies.

28 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

These are only a few ways that a landlord port can act to raise berth productivity—and it is

clearly in the port’s best interest to do so. The current hands-off attitude of port officials is

counterproductive and allows port congestion problems to worsen.

MASTER PLANNING

One of the best tools for guiding the effective development of ports is the port master plan. The

lack of an updated plan is affecting Damietta’s long-term development. Without an updated plan

the port does not have a foundation for making decisions or for accommodating requests from a

variety of investors for spaces in the port. Land use and operational conflicts are brewing. For

example, the allocation of a large parcel of land behind the container terminal effectively

prevents an expansion of that terminal or the development of a much-needed empty container

storage depot. It appears that the allocation of land just to the north of the new terminal to non-

port use greatly constrains options for that facility. A number of other land use conflicts could

also be addressed in a master plan.

The benefits of a current master plan are evident in the ports of Alexandria and El-Dekheila. The

former recently greatly improved external accessibility and internal traffic flows by implementing

a comprehensive transportation plan that was a component of its master plan. The latter has

allocated space properly for a container park and is developing long-term plans for additional

facilities. Officials also indicate that they are considering moving some bulk terminals, in

particular the coal terminal, to El-Dekheila to create space for development more appropriate for

Alexandria. This is a very rational way to plan the long-term development of a port.

Exhibit 5-1 Features of a Good Master Plan

• Demand analysis and long-term cargo

and fleet forecasts.

• Detailed infrastructure and land use

assessment.

• Detailed operations and technical

assessment.

• Organizational, financial, and human

resources assessments.

• Creation and evaluation (economic and

operational) of alternative short,

medium, and long-term development

scenarios.

• Identification of most appropriate

development scenarios and targets.

• Creation of a framework for the short,

medium, and long-term development.

• Overall financial and risk assessment.

• Environmental impact assessment.

P O R T D E V E L O P M E N T 2 9

SUMMARY AND CONCLUSIONS

Overall, the ports at Damietta, Alexandria and El-Dekheila are generally well managed, well

equipped, and have very good professional staffs. They also share a number of common

problems, such as low productivity in the container and general cargo operations, vessel

congestion in the harbor, and with the exception of El-Dekheila a relative lack of space to grow.

For Damietta, there are a number of specific problems that should be dealt with soon to

minimize their negative impact on major projects now being planned.

Berth Productivity. Berth productivity at Damietta is surprisingly low given the quality of capital

equipment available. Productivity is impeded by technical problems with various operating and

operations control systems, incompatible operating systems, lack of incentives for the operating

companies to increase productivity, lack of training or experience in the use of modern

technologies or cargo handling systems, and poor organization of some yards and quay support

areas.

Operational risks of proposed terminal. The proposed container terminal raises serious

concerns about safety, vessel congestion, and landside impacts. Results of desktop simulations

of basin width and operating safety are being evaluated, but the extent to which the models

incorporated the “oops” factor (human error, mechanical breakdown) is unknown. Our analysis

indicated that another 40 meters in basin width could provide an adequate safety margin for

emergency tug operations without significantly decreasing the total size of the container yard.

Although the extra width of the basin slightly decreases the size of the terminal overall, it more

directly affects the amount of space available behind the southeast quay for handling Suezmax

vessels. The port must be willing to consider a variety of options to facilitate the development of

an efficient and effective operations system.

If the terminal realizes the additional 3,000 ship calls that government officials project, this

means an average of 17 vessels per day will call the port and, if vessel dwell times do not

improve, 38 vessels in the harbor per day. This in turn implies long delays in the anchorage and

significant loss in revenue as ships go elsewhere or increase rates.

PORT OPERATIONS RECOMMENDATIONS

Our recommendations are divided into 3 parts: 1) those that are specific to Damietta; 2)

important studies to be undertaken; and 3) overall port development and general policy

considerations. With respect to Damietta, the focus is primarily on the container and general

cargo operations, IT systems, and planning issues pertaining to the proposed new container

terminal.

Container Operations

The terminal’s operators have been planning to deepen the container berths to 17.5 meters to

attract mother ships with the intent of being able to compete with the proposed new container

terminal. Before this can happen, however, they need to greatly upgrade the efficiency and

productivity of the present berths and yards. The first priority should be to complete the

30 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

installation of the NAVIS CTMS system and learn how to apply it to effectively organize the yard

operation. The objective should be to upgrade the operation to be able to handle a minimum of

25 moves per crane-hour. For example, if 3 cranes are working simultaneously, the yard should

be able to efficiently accommodate 75 container moves per hour. The second priority should be

to convert the entire yard to a high density RTG system so as to accommodate the high call

volume a mother ship will generate. This conversion would also include the integration of reefer

stations into the RTG stacks at the back of the terminal to maximize the utilization of available

space.

Additionally, the operators need to clear all obstacles to efficient operations such as junk,

broken down machinery, container stripping operations, and all secondary services from the

main operations area. They also need to establish maximum allowable dwell times for

transshipment containers and install a fully secured perimeter and control system dedicated for

container terminal security. Finally, moving long-term storage of empties off the terminal to a

nearby ICD should be considered. The only empty containers that should remain on the terminal

are those scheduled to be recycled out of the country within 48 hours.

General Cargo

The general cargo operations are a problem in all three ports for very much the same reasons:

poor unitization, lack of appropriate modern handling systems, and a reliance on direct

discharge to trucks rather than indirect discharge systems to transit sheds or open storage

areas. The key focus of the operator (and port) is to significantly upgrade the unitization and

palletization of the primary types of general cargo being handled in the ports. This will require a

partnership between the operator and the port to work with the importers/shippers to define

more effective ways to package the cargo to facilitate handling both ship-shore operations and

on the quay. Once properly unitized the next step is to identify the best systems for vessel

loading and discharge. The final step will be to convert the operation to an indirect discharge

system.

To facilitate this conversion, we strongly recommend that the port or ministry secure the

services of an expert in general cargo handling systems to advise the different ports and

operators on the various options that are available for upgrading the general cargo operations

and possibly assisting the operators in procuring and implementing the new handling systems.

Port Information System

The Port Authority of Damietta (PAD) has a modern IT system which has been operational for

two years. PAD has sufficient funds to further develop and expand its IT systems. However,

there are several areas of improvement where the port can benefit from technical assistance to

ensure that the PAD aligns its IT strategy (automation) with the port’s business objectives

(efficiency and profitability), ensuring that the port stays on track to achieve its strategies and

goals, and implementing ways to measure IT performance.

Areas for improvement include:

1. Better use of data by implementing several actions:

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a. Introducing an Executive Information System. b. Implementing IT Governance. c. Develop a system for data verification.

2. Vessel Traffic Services (VTS) are currently adequate. However, it is recommended that it be upgraded to accommodate expected traffic growth generated by the proposed new container terminal;

3. Improve the implementation process of the wireless network (to manage port

operations), the deployment of which is behind schedule. The port specified a hardware

and communication system for the RDTS that did not provide sufficient coverage and

reliability. Now they have re-tendered the system using “performance specifications” to

allow the system integrator to solve the problem.

Better Use of Data

The port is giving IT a high priority and has already invested in providing a modern IT system.

This action is an important first step to modernize the port operation and efficiency, but the port

needs to go further in order to capitalize on IT’s abilities to improve port efficiency and to

optimize the return on IT investment. Specifically, operations can be further improved if

managers can make more informed decisions. So the port should implement an Executive

Information System to enable managers to access real time reports.

Though notable progress has been made in the development of the existing system, the port

can benefit from a technical assistance program to implement the recommendations addressed

earlier in this report.

The Proposed Container Terminal and Port Planning

The proposed container terminal presents some serious problems with respect to vessel

operations and its impacts on the overall operations of the port. The port needs to fully address

the issue of safe vessel operations in the proposed basin and acceptable risk. Therefore, it is

strongly recommended that the port conduct the following assessments and studies:

• Conduct full-scale bridge simulations testing the risks of a 280m versus 320m wide basin

under different emergency scenarios. Simulations should involve pilots and tug captains

from the port, and experienced captains of mother container ships expecting to use the

facilities.

• Conduct a detailed assessment of the potential impact of the new terminal on overall port

operation and development.

• Conduct a detailed vessel traffic study and evaluate options for a two-way or a second

channel.

These studies can be carried out as independent studies or as part of a port master plan, the

latter of which should be undertaken in the near future to better guide port expansion and

mitigate against conflicting land uses.

With respect to enhancing Egyptian port system performance overall, we suggest the

government:

32 P O R T O F D A M I E T T A O P E R A T I O N A L E F F I C I E N C Y

• Investigate options for developing dry ports or cargo villages to house secondary port services

and port-related manufacturing industries.

• Provide technical support services for port planning, operations, IT systems, and port

development.

6. General Port Sector Policy Recommendations

This assessment has identified a number of areas for new policy considerations. Egypt needs to

address the relationship between the ports and their tenants. It is strongly recommended that

the Ministry/Port Authorities develop a pro-active program to assist tenants and operators

increase berth and terminal productivity. This policy is critical for addressing the increasing

vessel congestion in Egypt’s harbors.

Urban encroachment hinders the port’s ability to expand. While some countries are exploring

physical relocation of terminals, others are seeking to maximize physical capacity by relocating

ancillary activities outside the terminal. Experience elsewhere shows that container freight

station services, warehousing, empty container storage, container repair, car parks and truck

staging areas, hazmat storage, and value-added merchandizing, such as assembly, labeling,

and packaging, have all been relocated outside the confines of port terminals. Egypt should

make a concerted effort to identify such services in the ports and develop options for their

relocation and assess the merits of private sector investment in the new sites (loosely referred

to as Logistics Platforms).

As Egypt’s port sector continues to transform to a landlord form of port administration, there will

be opportunities to expand private sector participation. As this privatized environment evolves,

however, an oligopolistic environment will emerge, indicating a risk of anticompetitive behavior.

Private sector participation notwithstanding, port authorities in many cases will have monopoly

pricing positions for several essential services. Considering both private and public sector

dimensions, therefore, Egypt should establish an independent port regulator to ensure

acceptable performance standards and to monitor pricing/service contract behavior among port

operators. This regulatory reform effort, however, should be accompanied with a policy that

encourages competition as a means for maintaining market discipline. This will enable Egypt to

have a “light touch” regulatory approach, with a focus on monitoring competitive behavior as

opposed to setting prices.

While Egypt has undertaken notable port sector reforms that, with the recommendations

presented in this report, can induce substantially improved port performance, the country will

still be challenged to attain acceptable performance from the transport logistics chain. We have

learned from international experience, even in ports that have excellent reputations for efficiency

(e.g. Rotterdam, Amsterdam, New York, Los Angeles), that port efficiency can be constrained

by factors outside the port’s gates. Improved performance inside the terminals can be negated

by poor performance along the transport logistics chain. The paradigm for lowering transport

P O R T D E V E L O P M E N T 3 3

costs by focusing on port performance is no longer valid; today, freight corridors, of which ports

form only a part, are now competing with other freight corridors. Inter-port competition has been

replaced by inter-corridor competition, and time and cost have now been joined by reliability as

factors affecting transport competitiveness. This suggests the need for Egypt to go beyond the

port gates and promote a policy that encourages efficiency from port gates to hinterland points.

It is in the ports’ interest to improve logistics chain performance to grow their customer base. It

is in the country’s interest to improve logistics chain efficiency to enhance global

competitiveness.

Though Egypt can pursue a number of policy options for improving port and transport sector

performance, it must do so in an environment of ever-increasing security protocols. The US’s

Customs-Trade Partnership Against Terrorism program, the European Union’s Authorized

Economics Operator Program, and the impending introduction of similar guidelines from the

ASEAN community ultimately mean that Egypt will be subjected to some form of security

guidelines from the vast majority of its trading partners. While these guidelines are not

mandates, failure to comply greatly increases the likelihood for more “robust” Customs

inspections in trading partner countries, thereby increasing the risk of delay. From an economic

perspective, we know from the recent literature that each day of delay for imports in the US

incurs an extraordinary inventory cost equivalent to 0.8 percent of the value of the goods carried

in the container. So Egypt’s exporters will be challenged to secure their logistics chains to avoid

the extraordinary cost associated with delay. Egypt’s exporters have come up with their own ad

hoc solutions for guideline conformance, losing economy of scale advantages that a more

uniform approach would offer. Egypt should therefore develop its logistics systems to make it

easier for all of its exporters to comply with the security guidelines without hindering freight

movements. Today’s IT technologies offer the potential to develop a solution while actually

encouraging efficiency, with at least one firm offering a Secured Transport Logistics Chain

solution presented in Egypt two years ago. The potential efficiency gains from security solutions

offer the possibility to remove existing hinterland transport constraints and exact more efficient

utilization of freight corridors and truck fleets.

APPENDIX

How to Handle Wood as General

Cargo

Bundled wood products are not being handled efficiently or safely at the ports of Damietta and

Alexandria. Both ports are experiencing serious breakage of wood bundles and damage to cargo. Three

problems cause such breakage and each has a solution.

The wood is poorly unitized. The exporter simply places the bundle on three cross pieces and then straps

them to the bundle with .75” inch steel banding. The bundle then shears and shifts for lack of a solid

foundation to hold it together. Figure A-1 shows how to use and handle wood of different sizes (using

English units of measure). When wood cargo is discharged from the vessel it must be stacked on

preconstructed pallets. The pallets provide a solid base that will resist the shearing forces caused by

lifting. The pallets should be the same length as the wood. For wood more than 2 meters long the pallet

should be at least 1 meter wide and constructed of 2-inch (5cm) thick planks screwed into at least four

2”x4” (5x10cm) cross beans, leaving an overhang of approximately 6 inches (15cm) beyond the outside

cross beam. Screwing rather than nailing the planks into the cross beams makes them easier to

disassemble and reuse, thus greatly reducing the cost of the pallet. For thinner wood, the exporter can use

the same as in the bundle and screw two together to form the cross beams. Each plank forming the floor

of the pallet must be screwed to each cross beam for the pallet to function properly.

The steel cable and hook rigging system that stevedores use to discharge the cargo tends to break the

bands holding the bundles together. Stevedores need to use 2-inch (5cm) wide nylon web slings attached

to a steel “0”ring as shown in Figure A-1. These slings stretch and are soft; they do not cut into the bands,

and are as strong as steel. They are formed in a loop and are simply draped around the overhand at the end

of the pallet.

Forklifts with forks set only 2-3 feet apart are being used to handle the wood. This fork spacing allows the

bundles, especially those more than 2 meters long, to sag on each end, again putting significant shearing

pressure on the bands holding the bundle together. To move wood pallets on the ground, stevedores

should use a 3-forked attachment that can be automatically widened to approximately 5 feet (1.5m). The

attachment will prevent sagging at the ends of the bundle and help stabilize transport and lifting to trucks.

Both of the attachments shown in Figure A-2 can be set up with three forks.

A -2 A P P E N D I X

Figure A-1

Standard Pallet

Figure A-2

Forklift Configurations

P R O - P O O R G R O W T H E N V I R O N M E N T 3

Technical Assistance for Policy Reform II BearingPoint, Inc,

18 El Sad El Aali Street, 18th Floor, Dokki, Giza

Egypt Country Code: 12311

Phone: +2 02 3335 5507 Fax: +2 02 3337 7684

Web address: www.usaideconomic.org.eg